The Philippine Stock Exchange may ask stockbrokers owning five percent in the local bourse to sell their shares to the bourse.
PSE chairman Jose Pardo said in a chance interview over the weekend the move was one of the options that the local bourse was considering to comply with the 20-percent single industry ownership limit.
The Securities Regulation Code states that “no person may beneficially own or control, directly or indirectly, more than five percent of the voting rights of the Exchange and no industry or business group may beneficially own or control, directly or indirectly, more than twenty percent of the voting rights of the Exchange.”
Pardo said the exchange had identified the brokers whose ownership of the exchange exceeded the five-percent limit.
“Maybe we can compel them to sell their shares because it is a violation. We have already identified those brokers that have gone beyond the five percent,” Pardo said,
Pardo said the PSE board of directors would meet this week to submit with the Securities and Exchange Commission the options on how the exchange could comply with the ownership limit.
“We are really committed to address that problem that has long been an issue with the regulators,” Pardo said.
“We hope that by the end of the month, we will be able to finalize and submit the options with the SEC because it has to be approved by our regulator,” he added.
The PSE earlier reported that broker ownership as of end February 2019 was at 26.44 percent.
PSE president and chief executive Ramon S. Monzon in April said the local bourse must issue about P5 billion worth of shares to bring down brokers’ ownership. Jenniffer B. Austria
Monzon said the PSE could dilute brokers’ ownership in the exchange by issuing shares after failing to convince brokers to sell their holdings to the exchange.
Meanwhile, Pardo said the PSE was still evaluating the renewed offer of state-run Land Bank of the Philippines to acquire a 49-percent stake in Philippine Dealing System Holdings Corp. PSE owns a little over 20 percent interest in PDS.
“We are talking with Landbank and we are studying,” Pardo said.